COVID-19 and Insurance Update - 26/10/2020

As Australia continues to deal with the pandemic, we wanted to reach out to reiterate our support at this time. EBM remains committed to working with you through COVID-19 and offering the same personalised service we always have.

 

Your Account Manager is available to meet with you in person (WA and QLD only), by phone or through a virtual meeting. We will continue to stay in regular contact to ensure you have the information and resources you need. Please do not hesitate to contact your EBM Account Manager should you have any questions or concerns.

 

COVID-19 and Business Interruption Insurance Claims in Australia - Update

 

As businesses continue to experience financial pressure from COVID-19 with forced closures and restricted trading, many businesses look to their Business Interruption (BI) insurance for relief.

 

Unfortunately, most BI insurance policies contain an exclusion for losses arising from a pandemic, such as COVID-19, where the disease has been designated under the Quarantine Act 1908, or the current Biosecurity Act 2015.

 

BI insurance cover cases are currently working their way through the courts around the world. An Australian Test Case was recently launched jointly by the Australian Financial Complaints Authority (AFCA) and the Insurance Council of Australia (ICA) with the aim of testing certain exclusions, with the hearings now in progress. The outcome of this case may provide greater clarity around the treatment of pandemic related claims.

 

We will keep you informed on progress of the Australian Test Case. If it indicates that certain businesses holding BI insurance may have a valid claim, we will notify you and invite you to lodge a claim.

 

Until such time as the position on the policy interpretation is clarified, please make sure that you keep any documents (that relate to the closure of your business and income and/or losses suffered during that period) safe and ready to be submitted to insurers. This may be the data you have on your business reporting system (like MYBOS or similar) or alternatively, data from your accountant that would enable you to prove an accurate figure of loss. The test case may take time to reach a resolution stage and preserving evidence is important.

 

Government Support Programs for COVID-19

 

There have been several announcements released in the past few weeks regarding the various state and federal government support programs for COVID-19.

 

The National Insurance Brokers Association of Australia (NIBA) has prepared a comprehensive guide to explain the federal and state initiatives to support small and medium businesses around Australia, including details on:

  • The National Cabinet Roadmap for easing Coronavirus restrictions
  • JobKeeper Payment factsheets for employers
  • Coronavirus SME Guarantee Scheme which will support small and medium enterprises to gain access to working capital to help them get through the impact of COVID-19
  • Increased Instant Asset Write-off
  • Backing Business Investment (BBI) measures to provide an incentive to businesses with aggregated turnover of less than $500 million
  • Assistance to help retain apprentices and trainees
  • Various state-based programs and support initiatives.

For more information about the government support programs for COVID-19, please visit the NIBA website.

 

WA Workers’ Compensation Act 2020 Legislative Changes

 

The WA Workers' Compensation (COVID-19 Response) Act 2020 and supporting Regulations came into effect on 12 October 2020. Some of the key points are as follows:

  • Enabling regulations to be made which provide for a rebuttable presumption that COVID-19, contracted by health care workers, is work-related
  • Removing the common law termination day
  • Revised notice to workers about common law claims.

With the removal of the termination day, a 3-year limitation from the date of injury (as per the Limitation Act 2005) will now be applied for workers to pursue common law damages. Previously, a worker was required to elect prior to their termination date which was usually 12 months from the date weekly compensation payments were made on the employer.

 

WorkCover WA has advised:

  • The amendments do not affect the procedural requirements to elect to pursue common law damages based on a whole person impairment of at least 15%, and to commence proceedings after an election is registered with the Director.
  • Transitional arrangements in the legislation provide for workers to make an election to pursue common law damages even if the termination day had expired before 12 October 2020.

For more information please visit WorkCover WA.

 

Here to help

 

We will continue to do our best to keep you informed. If you have any questions, please contact your EBM Account Manager on 1300 755 112 for further information.


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